There’s no doubt that no matter how high or low your energy bill is, periodically evaluating your energy needs can help you save on utility bills.
One way many Americans have chosen to regulate the amount of energy they use at home is by using smart meters, which are electronic devices that measure power usage.
Smart Meters: Are They Worth It for Your Home?
“Your power company likely has installed what are known as smart meters at your residence or your small business,” says money expert Clark Howard.
Clark says smart meters became popular with power companies several years ago because they eliminated the labor costs of meter readers. But then things changed.
“Today’s smart meters can charge you for power by time of day and even minute by minute,” Clark says. “And so, more and more power companies are offering you and me the ability with these smart meters to pay for time of use.”
Smart Meters: Minute by Minute vs. Time-of-Use
With minute-by-minute smart meters, you’re paying for actual energy consumption in real-time. Rather than gauging usage over a set period, minute-by-minute metering allows the power company to track usage patterns more precisely.
Clarks says for the regular energy customer, tracking power minute-by-minute is impractical, so it’s hard to keep the power company honest.
“With us, it’s not really possible for us to be able to — with our busy lives — watch what power costs the power companies minute by minute,” Clark says, “but there are general trends and patterns.”
On the other hand, a time-of-use meter generally charges you different rates for peak and off-peak hours.
“A lot of power companies now offer time of use, where … depending on where you are in the country, from 2 to 7 in the afternoon, the cost of power is through the roof,” Clark says. “After 7 p.m. to about midnight, power is at a much more reasonable rate, and then midnight to like, 5, 6, or 7 a.m., power is really cheap and maybe even free to you.”
In addition to having the time of use, they may have a regular plan that just sets rates typically by the time of year, Clark says.
Should You Get a Smart Meter?
“So which one should you be in? It depends on your lifestyle,” Clark says.
Clark paints different scenarios for different types of energy customers when it comes to smart meters.
For Full-Time Day Workers? Yes
“If you’re gone all day long and you put in a smart thermostat like a Nest or any other kind and you turn the temperature way up in your home during the peak hours, when they’re charging the crazy-high kilowatt cost, then a smart meter would work for you.”
“If you’re gone during those hours anyway … you put in that smart thermostat, you drive down your consumption during those five or so hours of the day, you’re going to save a lot of money on your power,” Clark says.
If You Have an Electric Vehicle Charger at Home? Yes
Clark says if you drive an electric vehicle and have a charger at home, “these time-of-use plans are fantastic because with your home charger, you set the vehicle only to charge during the hours when you’re paying a penny a kilowatt, or you’re having free overnight power or whatever,” he says. “And then your energy costs for your vehicle go to near zero.”
If You Have Kids at Home? No
“What about a family with kids? Forget it,” Clark says. “Doing a smart meter and a thing where people are in and out of the house, you got millions of loads of laundry to do and all that, a smart meter will be the death of your wallet if you go on the smart plan that has the peaks and off-peaks.”
Final Thoughts
Clark says smart meters may not be so smart for people who can’t truly take advantage of the terms.
“You’ve got to know your circumstance to see if it’s worth it for you to go on time of day, time of use plans,” he says. “Otherwise, the simple, regular plan is the smarter choice.”
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